Highlights

• The Inflation Reduction Act (IRA) significantly changes the tax code to incent companies to invest in energy security, reduce carbon emissions, and increase energy innovation.
• To maximize the value of the tax credits contained in the IRA, companies must follow labor rules that include paying specific workers a "prevailing wage" and employing a certain number of registered apprentices.
• A transition period offers companies some breathing room on the labor rules until the government issues implementation guidance.

President Joe Biden signed the Inflation Reduction Act (IRA) into law on Aug. 16, 2022. The massive legislative package revises policy on taxes, healthcare, agriculture and energy. In particular, the IRA modifies and expands existing credits and creates new tax credits for a variety of renewable energy and carbon capture industries and projects (a full description of these tax credits can be found in a previous Holland & Knight alert, "The Inflation Reduction Act: Summary of the Budget Reconciliation Act," Aug. 8, 2022).

This Holland & Knight alert focuses on the new labor rules that must be followed to take advantage of the higher credit values included in the IRA.

IRA Tax Credits for Energy Generation and Construction

The importance of the tax incentives contained in the IRA for energy and carbon capture are difficult to overstate. These credits represent a major investment in renewable energy generation, including through hydrogen and nuclear...

Read Full Story: https://www.hklaw.com/en/insights/publications/2022/09/the-inflation-reductio...